NORMAL  SCHOOL  QUARTERLY 


Published  by  the  Illinois  State  Normal  University , Normal , Illinois 


Series  1 


APRIL , 1903 


No.  5 


The  Tariff  Question  in  American  History. 

Our  ship  of  state  under  the  Articles  of  Confederation  stranded 
upon  the  rock  of  revenue.  When  the  First  Congress  met  under  the 
Constitution  it  lost  no  time  in  providing  revenue  for  the  govern- 
ment’s support. 

The  Act  The  Pream^e  this  tariff  act  states  that  the 
of  1789  ac^  ^signM  to  provide  means  for  the  support  of 

the  government  and  for  the  payment  of  its  debts, 
and  to  provide  for  the  encouragement  and  the  protection  of  manu- 
factures. The  act  was  short  and  its  rates,  some  being  specific  and 
some  ad  valorem , were  low. 

A few  months  later  the  House  of  Hepresentatives  directed 
Alexander  Hamilton,  Secretary  of  the  Treasury,  to  report  upon  the 
subject  of  manufactures.  TVo  years  afterwards  his  report  was 
sent  to  the  House.  It  is  generally  admitted  to  be  the  best  argu- 
ment for  protection  ever  written  in  America. 

Mr.  Hamilton  maintained  that  agriculture  and  man- 
HamiltoiTs  ufacturing  were  pursuits  of  equal  value  and  that 

Report  Upon  neither  could  flourish  at  its  best  without  the  other. 
Manufactures*  Manufacturing  would  bring  the  division  of  labor  and 
the  introduction  of  machinery;  it  would  lead  to  the 
employment  of  classes  that  would  otherwise  be  unengaged  in  industry; 
would  increase  immigration.  It  would  furnish  a steady  demand  for  the 
produce  of  the  soil.  Foreign  nations,  he  said,  were  trying  to  sell  us  every- 
thing and  to  buy  nothing  from  us.  If  Europe  would  not  buy  of  us,  we 
must  contract  our  wants  for  her  products.  That  manufactures  would 
grow  up  here  without  government  aid,  he  did  not  believe.  He  pointed  out 
that  the  influence  of  habit  and  the  spirit  of  imitation  in  men,  causes 
changes  in  occupations  to  be  made  more  tardily  than  is  consistent  with  the 
interest  of  individuals  or  with  the  interest  of  society;  that  the  fear  of 
failure  in  untried  enterprises  would  deter  the  very  capitalists  who  were 


most  likely  to  succeed,  from  making  the  attempt.  More  formidable  ob- 
stacles still  were  the  superiority  already  enjoyed  by  nations  that  had 
already  preoccupied  and  perfected  the  chief  fields  for  manufacturing  en- 
terprise, and  the  aids  of  various  sorts  granted  by  foreign  nations  to  their 
manufactories.  He  says:  “Whatever  room  there  may  be  for  an  expecta- 
tion, that  the  industry  of  a people,  under  the  direction  of  private  interest, 
will,  upon  equal  terms,  find  out  the  most  beneficial  employment  for  itself, 
there  is  none  for  a reliance,  that  it  will  struggle  against  the  force  of  un- 
equal terms,  or  will,  of  itself,  surmount  all  of  the  adventitious  barriers 
to  a successful  competition,  which  may  have  been  erected,  either  by  the 
advantages  naturally  acquired  from  practice  and  previous  possession  of 
the  ground,  or  by  those  which  may  have  sprung  from  positive  regulations 
and  an  artificial  policy” ....  To  the  objections  that  manufacturing  could 
not  succeed  in  the  United  States  because  of  scarcity  of  hands,  dearness 
of  labor,  and  lack  of  capital,  he  replied : Some  districts  of  America 
were  fully  peopled,  use  could  be  made  of  women  and  children,  and  of  immi- 
grants; the  disparity  of  wages  here  and  abroad  had  been  greatly  exagger- 
ated, and  the  cost  of  manual  labor  was  becoming  continually  of  less 
moment  in  consequence  of  the  increasing  use  of  machinery;  the  lack  of 
capital  could  be  overcome  by  expanding  the  circulating  medium,  improving 
credit,  attracting  foreign  capital ....  That  prices  of  manufactures  are  en- 
hanced by  import  duties,  Mr.  Hamilton  said,  seemed  reasonable  in  theory, 
but  was  seldom  borne  out  by  the  facts.  High  prices  might  be  the  tempo- 
rary effect  of  imposts  but  low  prices  were  the  ultimate  and  inevitable 
effect  of  every  successful  manufactory  established.  . . .The  establishment  of 
manufactories  here  would  bring  benefits  to  all  sections  of  the  country  and 
to  all  classes  of  the  people.  Ideas  of  a contrariety  of  interests  were,  in  the 
main,  as  unfounded  as  they  were  mischievous.  The  independence  and  the 
security  of  the  nation  seemed  to  be  closely  connected  with  the  adoption  of 
the  policy  of  protection. 


Early  Acts 
and 

Protection. 


During  the  first  twenty  years  of  our  national 
life  under  the  Constitution  at  least  twenty  acts 
that  had  to  do  with  the  tariff  were  passed.  The 
motive  behind  them  was  usually  a need  for  more 
revenue.  How  far  the  desire  to  protect  home  manufactories  fig- 
ured as  a subsidiary  motive  has  been  a matter  of  much  dispute. 
Protectionists  have  pointed  to  the  plain  wording  of  the  preamble 
of  the  Act  of  1789,  to  the  fact  that  many  of  the  duties  were  laid 
upon  articles  such  as  were  made  here,  to  the  sentiment  in  favor  of 
protection  to  be  noticed  in  many  of  the  speeches  made  in  Congress 


2 


Manufactures 
before  1808. 


in  the  years  immediately  following  Hamilton’s  report,  and  to  the 
fact  that  Congress  was  continually  beset  with  petitions  from  cities 
praying  for  protection.  On  the  other  hand  Benton  (Debates  of 
Congress,  Yol.  I,  p.  84,  Note)  says  that  every  speech  on  the  Act  of 
1789  showed  revenue  to  be  the  object  of  every  proposed  duty,  pro- 
tection being  merely  incidental,  and  that  the  Act  cannot  be  quoted 
as  any  authority  for  the  protective  system  that  later  so  disturbed 
the  country.  It  is  to  be  noted  that  the  rates  demanded  for  protec- 
ion  were  moderate,  Hamilton  himself  suggesting  no  ad  valorem 
rate  above  fifteen  per  cent,  and  suggesting  specific  duties  that 
would  be  prohibitory,  upon  only  a very  few  articles. 

That  it  had  been  the  English  policy,  carried  out 
with  a fair  degree  of  success,  to  throttle  manu- 
facturing in  America  during  our  colonial  period, 
is  well  known.  During  the  years  that  we  are  now  considering 
Great  Britain  was  in  the  midst  of  an  industrial  revolution  that  was 
to  tighten  her  grip  upon  the  prize — the  world’s  leadership  in  man- 
ufacturing. An  English  barber  had  discovered  a machine  that 
could  do  as  much  work,  in  the  textile  industries,  as  a thousand 
spinsters ; a poor  weaver  had  caught  from  a spinning-wheel  tipped 
over  by  children  at  play,  the  idea  that  led  to  the  invention  of  the 
spinning- jenny ; a duke,  disappointed  in  love,  had  conceived  in  his 
life  of  seclusion  the  scheme  that  materialized  in  three  thousand 
miles  of  navigable  canals ; a working  mechanic  at  Glasgow  had  seen 
that  steam  would  rush  into  and  expand  in  a vacuum,  and  the  steam- 
engine  was  the  result;  a farmer  boy  had  invented  the  “mule;”  a 
clergyman,  the  power-loom;  when  men  had  been  lacking  for  fac- 
tory operatives  the  greatest  English  statesman  had  uttered  the  ter- 
rible words,  “Take  the  children ;”  the  greatest  economic  philosopher 
of  England  had  written  his  remarkable  book,  An  Inquiry  into  the 
Causes  of  the  Wealth  of  Nations.  England  did  not  intend  that 
these  inventions  of  Arkwright,  Hargreaves,  Watt,  Crompton,  and 
Cartwright,  should  be  shared  with  the  world.  She  passed  the  most 
stringent  laws  forbidding  the  exportation  of  machinery  or  the  mod- 
els of  machinery. 


3 


From  Hamilton’s  report  and  from  other  sources  we  may  gather 
the  condition  of  manufacturing  as  an  industry  in  the  United  States 
during  this  period  (before  1808).  We  had  made  good  progress  in 
ship-building,  were  doing  well  in  manufacturing  leather,  boots,  har- 
nesses, gloves,  etc. ; we  made  from  iron,  implements  of  husbandry, 
household  utensils,  tools,  anchors,  etc.;  we  manufactured  sugars, 
liquors,  wool  hats,  tin  utensils,  wagons,  bricks  and  tiles,  and  many 
other  articles  of  the  cruder  sort.  The  textile  industries  were  al- 
most entirely  carried  on  in  the  household,  tho  carding  and  full- 
ing mills  were  many.  In  short  the  nation  remained,  as  the 
colonies  had  been,  mainly  agricultural.  Our  imported  manufac- 
tures were  paid  for  thru  agricultural  exports  to  the  West  Indies 
and  other  countries,  and  thru  the  proceeds  of  our  carrying-trade 
upon  the  ocean. 


Napoleon’s  Berlin  and  Milan  decrees,  the  Eng- 
^er*OC*  lish  Orders  in  Council,  our  own  Embargo,  and 

Restriction.  Non-Intercourse  Act,  the  war  of  1812-1815, 

completely  changed  the  condition  of  things.  Our 
foreign  trade  was  ruined.  What  we  did  not  manufacture  ourselves 
we  had  to  do  without.  Our  exports  and  imports  for  1808  aggre- 
gated less  than  one-third,  and  the  same  for  1814  less  than  one  twen- 
tieth those  of  1807.  These  years  of  restriction  gave  our  manufac- 
tories a wonderful  start.  The  first  cotton  factory  had  been  started 
in  1787  but  it  had  little  success.  Samuel  Slater  had  brought  over 
in  his  head  the  models  of  the  Arkwright  machinery  and  succeeded 
in  setting  it  us  here  in  1790.  Whitney  invented  the  cotton-gin  in 
1794.  Up  to  that  time  cotton  had  been  little  cultivated  in  Amer- 
ica. Its  cultivation  increased  rapidly  after  the  invention  of  the 
gin,  by  means  of  which  one  man  could  do  the  work  that  had  re- 
quired fifty.  Before  this  period  we  had  made  of  cotton  goods  only 
an  insignificant  part  of  our  large  consumption.  In  1803  there 
were  but  four  cotton  factories  in  America.  In  1812  there  were 
within  a radius  of  thirty  miles  from  Providence,  fully  fifty.  The 
consumption  in  bales  had  increased  between  1800  and  1815  from 
500  to  90,000  a year,  and  the  latter  date  saw  500,000  spindles  in 


4 


operation.  The  history  of  our  woolen,  iron,  glass  manufactories, 
etc.,  was  much  the  same — a small  start  before  this  period  and  a 
wonderful  growth  during  it.  Thomas  Jefferson  wrote  to  John 
Adams  in  1812,  “Nothing  more  salutary  for  us  has  ever  happened 
than  the  British  obstructions  to  our  demands  for  their  manufac- 
tures;” and  again  to  Kosciusko  the  same  year,  “'Come  peace  when 
it  will,  we  shall  never  again  go  to  England  for  a shilling’s  worth  of 
goods  where  we  have  gone  for  dollars’  worth.” 


The  Tariff 
of  1816. 


In  1812  all  duties  were  doubled  as  a war  measure 
and  these  war  duties  were  continued  until  the  Tar- 
iff of  1816  went  into  effect.  After  the  signing  of 
peace,  notwithstanding  the  war  duties,  large  importations  of  for- 
eign goods  began.  This  embarrassed  the  young  manufactories,  and 
some  of  them  failed.  Appeals  to  Congress  for  protection  were 
many.  The  effect  of  all  this  is  to  be  seen  in  the  tariff  of  1816. 
President  Madison  in  his  annual  message  of  1810  had  viewed  with 
satisfaction  the  growth  of  manufactories,  seen  in  them  some  com- 
pensation for  the  losses  of  war;  in  1815  he  held  that  the  manufac- 
tories should  be  considered  in  the  adjustment  of  the  duties,  that 
without  protection  lines  of  industry  may  fail  to  spring  up  even 
tho  we  are  particularly  fitted  to  carry  them  on,  that  free  trade  tho 
right  in  theory  admits  of  exceptions  in  practice. 

The  Tariff  of  1816  was  moderately  protective — so  moderately 
that  James  G.  Blaine,  in  his  historical  argument  for  protection 
(Korth  American  Review,  1889),  classes  it  among  free  trade  tar- 
iffs, and  lays  to  it  the  hard  times  in  1819.  E.  W.  Thompson,  in 
his  History  of  the  Tariff,  repeatedly  asserts  that  it  was  strongly 
protective,  and  that  under  its  favorable  influence  the  country  speed- 
ily recovered  from  the  depression  of  1819.  President  Monroe,  in 
his  annual  message  of  1822,  says  that  the  manufactories  of  the 
country  seem  to  be  prospering  again.  Mr.  Benton,  remarking  upon 
the  passage  of  this  so-called  Lowndes-Calhoun  bill  in  the  House, 
says  (Debates  of  Congress,  Yol.  V.,  p.  645)  : 

And  thus  was  inaugurated  a new  policy ....  Revenue  had  been  the 
object  of  import  duties,  and  protection  to  manufactures  the  incident.  Now 


5 


this  policy  was  reversed.  Protection  became  the  object  and  revenue  the 
incident,  to  such  a degree  as  often  to  disregard  revenue  altogether. 

The  ad  valorem  duties  under  this  act  ranged  from  seven  and 
one-half  to  thirty  per  cent,  and  the  specific  rates  were  even  higher. 
Upon  cotton  and  woolen  goods  the  rate  was  fixed  at  twenty-five  per 
cent  for  three  years,  and  at  twenty  thereafter.  On  cotton  cloths  some 
minimum  duties  were  established ; for  example,  cloth  costing  twen- 
ty-five cents  or  less  a square  yard  was  to  be  taxed  as  tho  costing 
twenty-five  cents.  When  in  the  course  of  a few  years  the  cost  of 
manufacture  became  cheaper  this  rate  became  practically  prohibi- 
tory as  to  the  coarser  grades.  There  was  no  woolen  minimum  and 
there  was  a duty  on  raw  wool  that  partially  offset  the  advantage  to 
the  manufacturer  of  the  duties  upon  the  imported  competing  manu- 
factured products.  The  iron  manufactories  were  not  favored  much 
in  this  act  but  were  given  higher  duties  in  1818.  The  equivalent 
ad  valorem  rate  upon  all  dutiable  goods  ran  about  thirty-three  per 
cent;  on  all  goods  free  and  dutiable  the  rate  ran  but  very  little 
lower,  for  the  free-list  was  small. 

The  first  strong  popular  movement  for  protection 
The  Tariff  came  in  consequence  of  the  hard  times  of  1819. 

Act  of  1824.  The  foreign  market  for  our  agricultural  exports 

was  poor,  and  the  demand  arose  for  protection  to 
our  infant  industries  and  for  a home  market  for  agricultural  pro- 
ducts. A high  tariff  bill  barely  failed  of  passage  in  1820.  The 
question  had  become  a sectional  one,  the  South  and  the  commercial 
interests  of  New  England  opposing,  and  the  middle  and  western 
agricultural  states  with  the  manufacturing  interests  of  New  Eng- 
land favoring  it.  The  agitation  was  kept  up  until  the  so-called 
Clay  Tariff  of  1824  was  passed.  It  was  carried  by  the  votes  of  the 
western  and  middle  states,  with  those  of  Ehode  Island  and  Con- 
necticut. This  act  raised  the  minimum  on  cotton  goods.  It  raised 
the  duties  on  woolen  goods  but  raised  also  the  duty  on  raw  wool. 
Under  the  operation  of  this  act  the  equivalent  ad  valorem  rates  on 
dutiable  and  on  all  goods  averaged,  respectively,  about  thirty-nine 
and  about  thirty-six  per  cent. 


6 


Henry  Clay,  author  of  this  bill,  and  “father  of  the  American 
system,”  in  his  main  speech  for  it,  argued : 

In  casting  our  eyes  around  us,  the  most  prominent  circumstance 
which  fixes  our  attention  and  challenges  our  deepest  regret  is  the  general 
distress  that  pervades  the  whole  country.  It  is  forced  upon  us  by  numer- 
ous facts  of  most  incontestable  character.  It  is  indicated  by  diminished 
exports....:  by  the  depressed  state  of  our  navigation;  by  our  diminished 
commerce ; by  successive  unthreshed  crops  of  grain . . . . ; by  alarming  dim- 
inution of  the  circulating  medium ; by  numerous  bankruptcies . . . . ; by  a 
universal  complaint  of  want  of  employment,  and  a consequent  reduction  in 
the  wages  of  labor ; by  the  ravenous  pursuit  after  public  situations . . . . ; 
by  the  reluctant  resort  to  the  perilous  use  of  paper  money;  by  the  inter- 
vention of  legislation ....  between  debtor  and  creditor ; and,  above  all,  by 
the  low  and  depressed  state  of  values ....  which  have  sunk ....  about  fifty 
per  centum  within  a few  years.  This  distress  pervades  every  part  of  the 
Union,  every  class  of  society;  all  feel  it,  though  in  different  degrees.  It  is 
like  the  atmosphere  which  surrounds  us — all  must  inhale  it,  and  none  can 
escape  it ....  It  is  most  painful  to  sketch  or  dwell  upon  the  gloom  of  this 
picture.  But  I have  exaggerated  nothing.  Perfect  fidelity  to  the  original 
would  have  authorized  me  to  have  thrown  on  deeper  and  darker  hues.  . . . 
What  is  the  cause  of  this  wide-spreading  distress. . . . ? We  are  the  same 
people.  We  have  the  same  country.  We  cannot  arraign  the  bounty  of 
Providence.  The  showers  still  fall ....  The  sun  still  casts  his  vivifying 
influence  upon  the  land.  The  land. . . .yields. . . .its  accustomed  fruits,  its 
richest  treasures.  Our  vigor  is  unimpaired.  Our  industry  has  not  relaxed. 
....Our  people  have. ..  .been  practicing  the  most  rigid  economy.  The 
causes  of  our  affliction  are  human  causes ....  The  causes  are  to  be  found 
in  the  fact  that  we  have  shaped  our  industry. . . .in  reference  to  an  extra- 
ordinary war  in  Europe,  and  to  foreign  markets  that  no  longer  exist. . . . 
We  have  allowed  our  resources  at  home  to  wither  in  a state  of  neglect. . . . 
Europe  has  no  longer  occasion ....  for  American  commerce . . . . 9 the  produce 
of  American  industry.  . . .The  greatest  want  of  civilized  society  is  a market 
for  the  sale. . . .of  the  surplus  produce  of  its  labor. . . .The  object  of  this 
bill  is  to  create  a home  market  and  to  lay  the  foundations  of  a genuine 
American  policy ....  Foreign  nations  cannot,  if  they  would,  take  our  sur- 
plus product ....  Our  powers  of  production  are  increasing  four  times  as  fast 
as  their  powers  of  consumption ....  If  they  could  take  it,  they  will  not. 
The  policy  of  all  Europe  is  adverse  to  the  reception  of  our  agricultural 
produce ....  For  years  our  export  trade  has  failed  to  grow  satisfactorily . . 
..Is  this  foreign  market,  so  incompetent  at  present,  likely  to  improve  in 
the  future  ? ....  It  must  become  worse  and  worse ....  Our  agriculture  is  our 


7 


greatest  interest.  . . .Can  we  do  nothing  to  invigorate  it?.  . . .We  must  give  a 
new  direction  to  some  portion  of  our  industry.  We  must  speedily  adopt 
a genuine  American  policy.  . . .If  we  cannot  sell  we  cannot  buy. . . .Four' 
fifths  of  our  people  make  comparatively  nothing  that  foreigners  will  buy, 
have  nothing  to  make  purchases  with  from  foreigners ....  It  is  vain  to 
tantalize  us  with  the  greater  cheapness  of  foreign  fabrics ....  A cheap  ar- 
ticle is  as  much  beyond  the  grasp  of  him  who  has  no  means  to  buy  as  a 
high-priced  one.... Let  us  suppose  that  half  a million  persons  are  now 
employed  fabricating  articles  abroad  for  our  consumption ....  They  are  in 
effect  subsisted  by  us ; but  their  actual  means  of  subsistence  are  drawn  from 
foreign  agriculture.  If  we  could  transport  them  to  this  country.  . . . their 
demand  for  flour,  beef,  pork,  and  other  articles  of  subsistence ....  would 
exceed  our  total  export  of  last  year ....  What  activity  this  would  give  to 
our  now  dispirited  farming  interests! . . . .But  if  we  give  by  this  bill  em- 
ployment to  an  equal  number  of  our  own  citizens.  . . .the  beneficial  effects 
. . . .will  be  nearly  doubled. 

Daniel  Webster,  in  reply,  said  he  did  not  know  where  any  such 
distress  existed.  In  the  New  England  states  was  general  prosper- 
ity. Prices  were  low  only  as  compared  with  the  inflated  prices 
measured  in  paper  after  the  war.  He  denied  that  the  manufac- 
tories needed  more  protection.  The  protective  policy  might  be  all 
right  within  bounds,  but  carried  to  the  point  of  prohibition,  it  be- 
came absurd. 

The  bitterness  of  the  South  towards  the  Clay  Tariff  can  be 
judged  from  the  following  expressions,  to  be  found  in  the  speech 
of  John  Randolph: 

I speak  with  knowledge  of  what  I say,  when  I declare,  that  this  bill  is 
an  attempt  to  reduce  the  country  south  of  Mason  and  Dixon’s  line  to  a 
state  worse  than  its  colonial  bondage;  a state  to  which  the  domination  of 
Great  Britain  was,  in  my  opinion,  far  preferable,  for  the  British  Parlia- 
ment would  never  have  dared  to  lay  such  duties  upon  our  imports ....  It 
is  a sacrifice  of  the  interests  of  a part  of  this  nation  to  the  ideal  benefit  of 
the  rest.  It  marks  us  out  as  the  victims  of  a worse  than  Egyptian  bond- 
age.. . .and  I trust  it  will  be  met  in  the  southern  country  as  was  the  Stamp 
Act ....  I do  not  stop  here  to  argue  about  the  constitutionality  of  this  bill ; 
I consider  the  Constitution  a dead  letter ....  “You  may  intrench  yourself 
in  parchment  to  the  teeth,”  says  Lord  Chatham,  “the  sword  will  find  its 
way  to  the  vitals  of  the  Constitution” ....  There  never  was  a constitution 
under  the  sun,  in  which,  by  an  unwise  exercise  of  powers  of  the  govern- 


8 


ment,  the  people  may  not  be  driven  to  the  extremity  of  resistance  by  force 
...  .If,  under  a power  to  regulate  trade,  you  prevent  exportation;  if  with 
the  mo^t  approved  spring  lancets,  you  draw  the  last  drop  of  blood  from 
our  veins;  if,  secundum  artem,  you  draw  the  last  shilling  from  our  pock- 
ets, what  are  the  checks  of  the  Constitution  to  us?  A fig  for  the  Consti- 
tution! When  the  scorpion’s  sting  is  probing  us  to  the  quick,  shall  we 
stop  to  chop  logic?  Shall  we  get  some  learned  and  cunning  clerk  to  say 
whether  the  power  to  do  this  is  to  be  found  in  the  Constitution,  and  then, 
if  he,  from  whatever  motive,  shall  maintain  the  affirmative,  like  the  animal 
whose  fleece  forms  so  material  a portion  of  this  bill,  quietly  lie  down  and 
be  shorn  ? . . . . But  no  force — no  sir,  no  force  short  of  Russian  despotism, 
shall  induce  me  to  purchase,  or,  knowing  it,  to  use  any  article  from  the 
region  of  the  country  which  attempts  to  cram  this  bill  down  our  tnroats. 
On  this  we  of  the  South  are  resolved,  as  were  our  fathers  about  the  tea 
that  they  refused  to  drink. . . .If  any  gentleman  believe  that  I am  not  as 
much  attached  to  the  Union  as  any  man  on  this  floor,  he  labors  under  a 
great  mistake ....  But  there  is  no  magic  in  this  word  union.  I value  it 
only  as  the  means  of  preserving  the  liberty  and  the  happiness  of  the  people. 
The  marriage  of  Sinbad  the  sailor  with  the  corpse  of  his  dead  wife  was  a 
union,  and  just  such  a union  as  this  will  be,  if,  by  a bare  majority  in  both 
Houses,  this  bill  shall  become  a law. 

In  the  tariff  of  1824  the  woolen  manufacturers 
The  Tariff  were  favored  little  more  than  in  that  of  1816. 
of  1828.  There  were  heavy  importations  of  woolen  goods  in 

1825.  Now  came  a determined  fight  for  woolen 
minimum  duties.  A bill  barely  failed  of  passage  in  1827  that 
would  have  taxed  all  imported  woolen  goods  costing  between  forty 
cents  and  two  and  one-half  dollars  as  tho  worth  the  latter  amount, 
at  thirty-three  and  one-third  per  cent.  In  1828  John  Quincy 
Adams  and  Andrew  Jackson  were  the  candidates  for  the  presidency. 
Each  was  claimed  to  be  a friend  of  protection,  but  Adams  in  his 
three  annual  messages  had  omitted  to  say  anything  for  protection. 
Jackson  had  on  the  Democratic  ticket  with  him,  Calhoun,  whose 
hostility  to  protection  by  this  time  was  pronounced.  Adams  came 
from  a section  none  too  friendly  to  the  “American  system.”  The 
Democratic  ticket  needed,  in  order  to  win,  not  only  the  votes  of  the 
South  but  those  of  the  strong  protection  states  of  the  middle  west. 
It  is  claimed  that  the  bill  prepared  by  Jackson’s  friends  in  Con- 


9 


gress  was  never  intended  to  pass;  it  had  been  loaded  with  provi- 
sions so  distasteful  to  New  England  that  it  was  not  expected  her 
representatives  could  vote  for  it.  The  Southern  congressmen  aided 
in  voting  down  amendments  offered  by  New  Englanders  and  then 
voted  against  the  measure  at  the  last.  It  was  thought  to  throw  the 
odium  of  the  bill's  defeat  upon  New  England,  and  that  this  would 
hurt  the  presidential  chances  of  Adams  in  the  West.  In  the  end 
enough  New  England  members,  including  Webster,  voted  for  the 
bill  to  let  it  thru.  This  tariff  has  been  called  the  “tariff  of  abom- 
inations.” The  cotton  minimum  was  raised  again ; the  duties  upon 
woolen  goods  were  high,  tho  the  original  scheme  of  the  bill  of  1827 
had  been  knifed  by  the  insertion  of  a dollar  minimum.  For  the 
fiscal  year  ending  in  1830,  the  equivalent  ad  valorem  rates  were, 
on  dutiable  goods,  48.9,  and  on  all  imports  4-5.3  per  cent.  Adams' 
fourth  annual  message,  written  after  his  defeat,  came  out  squarely 
for  protection. 

- ..  The  Tariff  of  1828,  altho  its  worse  features  were 

Southern 

Discontent  g°^en  during  the  two  or  three  years  follow- 

ing, hurried  on  to  its  acute  stages  the  discontent  of 
the  South.  In  the  summer  after  the  passage  of  the  act,  Vice- 
President  Calhoun  developed  his  theory  of  nullification.  It  be- 
came the  basis  of  the  “South  Carolina  Exposition.”  This  docu- 
ment argued  that  the  South  was  and  must  remain  agricultural,  that 
there  must  be  permanently  a conflict  of  interests  between  it  and 
the  rest  of  the  Union  as  to  the  tariff  policy,  that  in  consequence 
Congress  should  be  careful  not  to  exceed  its  constitutional  rights  in 
laying  imposts.  It  maintained  that  a state  had  the  right  to  veto 
a law  that  was  palpably  unconstitutional,  but  declared  that  such 
action  was  for  the  time  being  deferred  in  the  hope  that  Congress 
would  see  fit  to  repeal  the  obnoxious  law — a hope  that  was  strong 
because  of  the  change  in  administration  close  at  hand. 

In  February,  1829,  South  Carolina,  thru  her  senators,  Hayne 
and  Smith,  presented  her  formal  protest  to  the  Senate  of  the 
United  States.  The  purport  of  the  protest  was,  that  Congress  had 
no  power  to  tax  the  people  at  its  own  good  will  and  pleasure,  and 


10 


to  apply  the  money  raised  to  objects  not  specified  by  the  Constitu- 
tion ; that  the  power  to  protect  manufactures  was  nowhere  given  to 
Congress  and  indeed  seemed  to  be  reserved  to  the  States ; that  tho 
the  power  to  regulate  commerce  might  be  so  exercised  as  to  protect 
domestic  manufactures,  yet  this  was  far  different  from  a power  to 
protect  them  eo  nomine ; that  even  tho  Congress  had  the  right, under 
its  power  to  lay  imposts  or  to  regulate  commerce  to  protect  manufac- 
tures, yet  a tariff  the  operation  of  which  should  be  grossly  unequal 
and  oppressive,  would  be  an  abuse  of  power  incompatible  with  the 
principles  of  a free  government;  that  the  very  existence  of  South 
Carolina  as  a state  depended  upon  her  agriculture  and  her  com- 
merce: that  lest  an  apparent  acquiescence  in  the  system  of  protect- 
ing duties  be  drawn  into  a precedent,  the  state  protested  against 
it  as  unconstitutional , oppressive , and  unjust . 

On  the  last  days  of  January,  1830,  occurred  the  great  debate 
in  the  Senate  of  the  United  States  upon  nullification.  Webster’s 
Reply  to  Hayne  struck  a responsive  chord  in  the  hearts  thruout  the 
North.  In  April,  at  a banquet  on  Jefferson’s  birthday,  .Calhoun 
and  his  sympathizers  tried  their  new  doctrine  of  nullification  on 
President  J ackson  and  discovered  that  it  was  a terrible  misfit.  In 
December  came  Jackson’s  annual  message.  One  paragraph  read: 

The  power  to  impose  duties  on  imports  originally  belonged  to  the 
several  States.  The  right  to  adjust  those  duties  with  a view  to  the  en- 
couragement of  domestic  branches  of  industry  is  so  completely  incidental 
to  that  power  that  it  is  difficult  to  suppose  the  existence  of  the  one  without 
the  other.  The  States  have  delegated  their  whole  authority  over  imports 
to  the  General  Government  without  limitation  or  restriction,  saving  the 
very  inconsiderable  reservation  relating  to  their  inspection  laws.  This 
authority  having  thus  entirely  passed  from  the  States,  the  right  to  exercise 
it  for  the  purpose  of  protection  does  not  exist  in  them,  and  consequently 
if  it  be  not  possessed  by  the  General  Government  it  must  be  extinct.  Our 
political  system  would  thus  present  the  anomoly  of  a people  stripped  of 
the  right  to  foster  their  own  industry  and  to  counteract  the  most  selfish 
and  destructive  policy  which  might  be  adopted  by  foreign  nations.  This 
surely  can  not  be  the  case.  This  indispensable  power  thus  surrendered  by 
the  States  must  be  within  the  scope  of  the  authority  on  the  subject  ex- 
pressly delegated  to  Congress. 


11 


In  his  annual  message  of  1829,  President  Jackson 
Tariff  Act  had  expressed  regret  that  nations  would  not  let  com- 
of  1832.  merce  flow  in  the  channels  to  which  individual  in- 
terest, always  its  surest  guide,  might  direct  it; 
thought  the  correct  policy  was  to  put  rates  where  they  would  in- 
sure fair  competition;  and  that  in  reducing  the  tariff  the  revenue 
duties  should  be  taken  off  first.  In  his  next  annual  message  he 
said  that  revenue  should  be  the  main  object  of  duties  but  that  they 
might  properly  be  so  adjusted  as  to  afford  protection,  that  in  the 
adjustment  the  government  should  be  guided  by  the  general  good 
and  that  only  objects  of  national  importance  should  be  favored; 
those  having  to  do  with  national  defence  deserved  attention  first, 
and  where  other  manufacturers  were  favored  the  aid  should  be 
merely  temporary.  He  condemned  combinations  of  small  minori- 
ties in  Congress  entered  into  for  mutual  assistance  in  measures, 
which  resting  solely  upon  their  own  merits  could  never  be  carried. 
In  1831  he  urged  reductions  to  relieve  the  people  from  unnecessary 
taxes. 

Mr.  Clay,  now  a senator,  was  not  prepared  to  abandon  protec- 
tion. He  admitted  that  the  revenue  must  be  reduced,  but  main- 
tained that  it  must  be  done  without  reducing  protective  duties.  “To 
preserve,  maintain,  and  strengthen  the  American  system,  he  would 
defy  the  South,  the  President,  and  the  devil/5  So  Adams  reported 
him  to  have  said.  He  introduced  a resolution  instructing  the  Com- 
mittee on  Finance  to  prepare  a bill  that  would  reduce  the  revenue 
by  taking  off  the  duties  on  most  articles  not  coming  into  competi- 
tion with  home-made  articles.  In  favor  of  the  resolution  Mr. 
Clay  said : 

Eight  years  ago  it  was  my  painful  duty  to  present  an  unexaggerated 
picture  of  the  general  distress  pervading  the  whole  land ....  If  I were  to 
select  any  term  of  seven  years  of  the  most  wide-spread  desolation,  it  would 
be  exactly  that  term  of  seA7en  years  immediately  preceding  the  establish- 
ment of  the  tariff  of  1824.  I have  now  to  perform  the  more  pleasing  task 
of  exhibiting  an  imperfect  sketch  of  the  existing  state  of  unparalleled 
prosperity.  On  a general  survey,  we  behold  cultivation  extended,  the  arts 
flourishing,  the  face  of  the  country  improved,  our  people  fully  and  profit- 


12 


ably  employed,  the  public  countenance  exhibiting  tranquility,  contentment 
and  happiness.  We  have  the  agreeable  contemplation  of  a people  out  of 
debt;  land  rising  slowly  in  value;  a ready,  tho  not  an  extravagant,  market 
for  all  the  surplus  productions  of  our  industry;  innumerable  flocks  and 
herds  browsing  and  gamboling  on  ten  thousand  hills  and  plains;  our  cit- 
ies expanded,  and  whole  villages  springing  up,  as  it  were  by  enchantment; 
our  exports  and  imports  increased  and  increasing;  our  tonnage,  foreign 
and  coastwise,  swelling  and  fully  occupied;  the  rivers  of  our  interior  ani- 
mated by  countless  steamboats;  the  currency  sound  and  abundant;  the 
public  debt  of  two  wars  nearly  redeemed;  and*  to  crown  all,  the  public 
treasury  overflowing,  embarrassing  Congress  to  select  objects  which  shall 
be  liberated  from  the  impost.  If  the  term  of  seven  years  were  to  be  selected 
of  the  greatest  prosperity  which  this  people  have  enjoyed  since  the  estab- 
lishment of  the  present  Constitution,  it  would  be  exactly  that  period  of 
seven  years  which  immediately  followed  the  passage  of  the  tariff  of  1824. 
This  transformation  of  the  condition  of  the  country  has  been  mainly  the 
work  of  American  legislation ....  If  the  extinction  of  the  public  debt  means 
the  subversion  of  the  American  system,  its  payment  will  be  the  bitterest  of 
curses. ..  .This  system  of  protection  began  upon  that  eVer  memorable  4th 
day  of  July,  1789.  A vast  majority  of  the  people  of  the  United  States  has 
approved  and  continues  to  approve  it.... The  question  is,  shall  we  break 
it  down  ? . . . . The  great  principle,  which  lies  at  the  foundation  of  all  free 
government,  is  that  the  majority  must  govern;  from  which  there  is  or 
can  be  no  appeal  but  to  the  sword.  That  majority  ought  to  govern  wisely, 
equitably,  moderately,  and  constitutionally,  but  govern  it  must,  subject 
only  to  that  terrible  appeal.  If  ever  one  state  or  a minority  of  the  states 
can  by  menacing  the  Union  force  the  abandonment  of  great  measures, 
from  that  moment  the  Union  is  practically  gone.  It  may  linger  on  in 
form  and  name  but  its  vital  spirit  has  fled  forever. . . .The  danger  to  our 
Union  does  not  lie  on  the  side  of  persistence  in  the  American  system,  but 
on  that  of  its  abandonment. 

The  resolution  was  passed,  as  was  a law  of  the  general  nature 
that  it  proposed.  The  Tariff  of  1832  remained  in  force,  as  we 
shall  see,  but  about  ten  months.  Because  of  the  increase  in  the  free 
list  the  equivalent  ad  valorem  rates  on  all  and  on  dutiable  goods 
now  draw  apart,  the  former  falling  much  more  than  the  latter. 


13 


Nullification.  The  year  that  followed  was  an  ominous  one. 

Compromise  A third  time  Calhoun  wrote  out  minutely  his 

Tariff  of  ideas  about  nullification.  He  went  over  the 

1833.  old  ground  again  and  one  step  farther,  in  that 

he  specified  just  how  a state  should  go  at  it  to  nullify  an  act  of 
Congress.  His  first  communication  had  gone  to  the  legislature,  his 
second  to  the  people,  and  this  one  went  to  the  governor  of  South 
Carolina.  The  state  was  quick  to  act.  The  legislature  called  a 
convention  of  the  people.  It  met  and  in  November  passed  an 
ordinance  of  nullification,  which  declared  the  Tariff  Acts  of  1828 
and  1832  “Null  and  void  and  no  law  within  the  jurisdiction  of 
South  Carolina ;”  prohibited  the  payment  of  imposts  after  the  first 
of  February ; forbade,  under  dire  penalties,  appeal  to  federal 
courts;  declared  that  any  attempt  on  the  part  of  the  United  States 
to  employ  force  would  sever  South  Carolina’s  connection  with  the 
Union. 

In  December  came  Jackson’s  annual  message.  It  foresaw  the 
extinction  of  the  public  debt;  declared  that  wherever  protection 
exceeded  what  was  necessary  to  counteract  the  regulations  of  for- 
eign nations  and  to  secure  articles  necessary  in  war,  it  should  be 
reduced  gradually  to  a revenue  basis ; that  perpetual  protection  was 
not  desirable ; that  the  whole  system  possibly  begot  a discontent  that 
outweighed  its  benefits ...  A few  days  later  was  issued  his  proclama- 
tion to  the  people  of  South  Carolina.  It  showed  the  false  and 
fatal  character  of  the  nullification  doctrine,  declared  that  the  laws 
of  the  United  States  must  be  enforced,  and  ended  with  an  appeal 
eloquent  and  tender  enough  to  start  tears  in  a patriot’s  eyes  even 
after  seventy  years  have  fled.  Mr.  Hayne,  now  governor  of  South 
Carolina,  issued  a proclamation  of  his  own,  denouncing  that  of 
President  Jackson.  He  called  for  volunteers.  Federal  soldiers 
were  already  on  the  scene.  The  situation  had  indeed  become  criti- 
cal. The  two  men  who  could  end  the  strife,  if  they  but  would,  were 
in  the  Senate  of  the  United  States:  Henry  Clay,  the  idol  of  the 
Whig  party  of  the  North;  the  other,  the  idol  of  more  than  his  own 
state  in  the  South,  John  C.  Calhoun,  who  had  resigned  the  Vice- 


14 


Presidency  in  order  to  be  elected  to  the  Senate,  where  he  could  be 
in  the  thickest  of  the  fray.  Unfortunately  for  the  country,  each 
of  these  two  men  seemed  to  have  but  one  idea  in  his  head — “and  this 
so  big  that  he  could  not  turn  it  over  to  examine  both  sides.”  How 
was  it  all  to  end  ? 


In  the  House  a bill  prepared  after  Jackson’s  idea  was  suffer- 
ing amendment  beyond  recognition;  the  Senate  had  before  it  an- 
other tariff  bill;  the  Force  Bill  was  being  quarreled  over  rather 
than  debated  ; less  than  three  weeks  of  the  twenty-second  Con- 
gress remained;  then  the  nullification  ordinance  of  South  Carolina 
would  be  in  effect ; and  other  southern  states  had  likewise  declared 
the  tariff  laws  unconstitutional  and  unjust — what  of  them?  Feb- 
ruary 12,  Mr.  Clay  astonished  the  Senate  and  the  country  by  the 
introduction  of  his  Compromise  Bill.  Calhoun  seconded  him. 
March  2,  it  was  a law;  and  March  11,  the  Ordinance  of  Nullification 
was  repealed. 


The  bill  provided  that  from  all  rates  of  duty  exceeding  twenty 
per  cent,  one-tenth  of  the  excess  should  be  taken  off  January  1, 
1834,  another  tenth,  a third  tenth,  and  a fourth  tenth,  each  after 
two  years;  then  one-half  of  the  remaining  excess  in  January,  and 
the  other  half  in  July,  1842.  Mr.  Clay  said  he  had  two  objects  in 
offering  the  bill : the  one  was  to  save  the  Union ; the  other  was  to 
save  the  American  system  as  long  as  he  could.  In  the  election  re- 
turns he  had  read  its  doom.  The  hardest  thing  in  the  Act  for 
Calhoun  to  accept  was  a provision  for  home  valuation. 

The  bottom  rate  of  twenty  per  cent  established  by 
the  Compromise  Tariff  remained  in  force  just  two 
months.  The  Whigs  had  come  into  power  again,  and 
the  Tariff  of  1842  was  made  strongly  protective,  its  rates  running 
about  thirty-four  and  about  twenty-eight  per  cent  respectively  on 
dutiable  and  on  all  goods.  The  Democrats  looked  upon  the  pass- 
age of  this  bill  as  a violation  of  good  faith,  claiming  that  the  con- 
sumer, after  he  had  put  up  with  high  rates  for  nearly  nine  years, 
supposing  that  the  final  twenty  per  cent  rate  would  last  indefinitely, 
was  now  cheated  out  of  the  benefit  in  consideration  of  which  he  had 


Tariff 
of  1842. 


15 


made  the  bargain.  The  Whigs  pleaded  that  the  treasury  was  empty, 
and  that  no  congress  could  bind  the  hands  of  its  successors.  Presi- 
dent Tyler  vetoed  two  bills,  which  would  have  raised  the  duties 
without  stopping  the  distribution  of  money  received  from  sale  of 
public  lands  among  the  states.  Taussig  says  of  this  Act  (Tariff 
History,  p.  113)  : 

It  had  not  such  a strong  popular  feeling  behind  it  as  had  existed  in 
favor  of  the  protective  measures  of  1824,  1828,  and  1832.  In  the  farming 
states  the  enthusiasm  for  the  home-market  idea  had  cooled  perceptibly; 
and  in  the  manufacturing  States  the  agitation  came  rather  from  the  pro- 
ducers interested  than  from  the  public  at  large.  There  is  much  truth  in 
Calhoun’s  remark  that  the  Act  of  1842  was  passed,. ..  .because  the  poli- 
ticians wanted  an  issue. 


As  the  infant  industry  and  the  home  market  arguments  for  pro- 
tection were  losing  their  force  and  popularity,  a new  argument  had 
been  coming  to  the  front  and  appeared  for  the  first  time  full-fledged 
in  the  debates  on  this  tariff.  It  was  the  pauper  labor  argument — 
the  argument  that  wages  here  are  higher  than  in  Europe  and  that 
the  discontinuance  of  protection  would  mean  the  reduction  of 
American  wages  to  the  European  level.  Hitherto  protectionists  had 
generally  argued  that  the  difference  in  wages  was  not  so  great  as 
usually  claimed,  and  not  sufficient  to  render  successful  competition 
on  our  part  in  the  end  impossible. 

The  election  of  1844  put  legislation  in  the  hands  of 
the  Democrats  and  brought  a notable  change  in  our 
tariff  policy.  The  main  principles  and  arguments 
back  of  the  new  policy  may  be  gleaned  from  the  messages  of  Presi- 
dent Polk  and  from  the  Treasury  Report  of  Secretary  R.  J.  Walker, 
in  1845,  Of  these  papers  the  following  will  give  some  idea: 


Tariff 
of  1846 


Only  so  much  revenue  should  be  raised  as,  added  to  the  receipts  from 
the  sale  of  public  lands,  will  support  economically  the  government. . . .No 
duty  should  ever  be  placed  above  the  rate  that  will  yield  the  largest  reve- 
nue. Duties  above  this  revenue  limit  are  for  protection  in  the  main  and 
are  not  constitutional.  They  are  not  authorized  by  any  express  grant,  and  is 
it  conceivable  that  such  immense  powers  would  have  been  left  by  the 
framers  of  the  Constitution  to  mere  inferences  and  doubtful  constructions? 
....Below  this  limit  there  may  be  and  should  be  discriminations.  Some 


16 


articles  yield  the  largest  revenue  at  rates  that  are  on  other  articles  wholly 
or  partially  prohibitory ....  The  maximum  revenue  duties  should  be  placed 
upon  luxuries.  Taxation  should  be  in  proportion  to  property.  Of  indirect 
taxes,  unless  care  is  taken, the  poor  will  pay  far  more  than  their  just  share. 
....  All  minimum  and  specific  duties  should  be  done  away  with,  as  thru 
them  the  poorer  grades  of  goods  are  taxed  as  high  as  the  better  grades. 
A tax  of  thirty  dollars  assessed  on  all  houses  without  regard  to  their  value 
would  be  intolerable.  So  would  a provision  that  all  houses  worth  less 
than  five  thousand  dollars  should  be  taxed  as  tho  worth  that  sum.  Spe- 
cific and  minimum  duties  are  no  better  in  principle ....  Duties  should  be 
arranged  so  as  to  keep  the  equilibrium  of  benefits  among  sections  of  the 
country ....  Two-thirds  of  the  taxes  collected  in  increased  prices  from  the 
people  under  the  existing  tariff  law,  do  not  reach  the  treasury  at  all  but 
are  paid  to  the  manufacturers.  No  proposition  to  collect  any  such  amount 
from  the  people  by  direct  taxes  and  to  turn  it  over  to  the  manufacturers 
would  be  entertained  for  one  moment.  The  profits  in  manufacturing  are 
double  those  in  agriculture.  The  manufacturing  capitalists  do  not  num- 
ber more  than  one-twentieth  of  one  per  cent  of  the  people,  from  whom  these 
heavy  taxes  are  collected.  The  occasional  fall  of  prices  under  a protec- 
tive tariff  proves  nothing,  is  usually  due  to  improvements  in  machinery, 
etc.  To  measure  the  cost  of  our  protection  we  must  compare  prices  at 
home  and  those  abroad ...  .Wages  have  not  risen  under  the  law  of  1842, 
while  prices  have.  The  number  of  laborers  working  in  protected  indus- 
tries does  not  exceed  four  hundred  thousand ....  The  Tariff  of  1842  raises 
more  revenue  than  is  needed,  imposes  many  prohibitory  duties,  and  many 
more  above  the  revenue  standard,  discriminates  against  the  poor,  and  is 
sectional  in  its  operation. 

The  Act  of  1846,  following  such  ideas,  sweeping  away  all  mini- 
mum and  specific  duties,  establishing  eight  classes  of  goods  paying 
rates  of  100,  40,  30,  25,  20,  15,  10,  5 per  cent  respectively,  a free 
class,  and  unenumerated  articles  paying  20  per  cent,  was  passed 
by  the  votes  of  the  West  and  the  South.  During  its  operation  the 
equivalent  ad  valorem  rate  on  dutiable  goods  averaged  a little  over 
twenty-six,  and  on  all  goods  a little  over  twenty-three  per  cent. 

President  Polk’s  annual  messages  speak  of  the  Act  as  having  largely 
increased  the  revenue,  increased  foreign  trade,  and  brought  great  prosper- 
ity in  all  industries.  President  Taylor  wanted  more  revenue,  encourage- 
ment to  manufacturers;  did  not  doubt  the  constitutionality  of  protective 
duties.  President  Filmore’s  messages  argued  for  protective  duties.  Presi- 
dent Pierce  claimed  that  the  revenue  was  becoming  greater  than  they  knew 
what  to  do  with  and  pleaded  for  reductions. 

17 


Tariff 
of  1857. 


Under  the  operation  of  the  Tariff  of  1846  the  impor- 
tations had  tripled  and  the  revenue  collections  dou- 
bled in  ten  or  eleven  years.  The  Act  of  1857  was 
passed  with  little  opposition.  Said  President  Buchanan  in  his 
inaugural  address : “Our  present  financial  condition  is  without  par- 
allel in  history.  No  nation  has  ever  before  been  embarrassed  from 
too  large  a surplus  in  the  treasury.”  The  new  law  kept  the  sched- 
ules of  the  preceding  law  but  reduced  the  rates  to  the  following: 
80,  30,  24,  19,  15,  12,  8,  4 per  cent.  Unenumerated  goods  paid  15 
per  cent.  There  were  some  shifts  from  one  class  to  another.  New 
England  united  with  the  South  in  voting  for  this  bill.  The  equiv- 
alent ad  valorem  rates  under  this  law  ran  about  20  and  16  per 
cent  on  dutiable  and  on  all  goods  respectively.  These  low  rates 
coupled  with  the  diminished  importations  during  the  hard  times 
following,  did  not  yield  revenue  enough,  and  Buchanan’s  messages 
in  1858  and  in  1860  call  for  revision.  He  recommends  specific 
duties,  alleging  frauds  under  ad  valorem  rates. 

It  is  sometimes  claimed  that  the  hard  times  of  1819,  1837,  and 
1857,  were  due  to  the  low  tariffs  of  1816,  1833-42,  1846,  and 
1857  ( as  in  the  books  of  H.  C.  Carey,  and  in  the  historical  argu- 
ment for  protection  by  James  G.  Blaine.)  To  this  Taussig  re- 
plies: “Yet  no  fair-minded  person,  having  even  a superficial 
knowledge  of  the  economic  history  of  these  years  can  entertain 
such  notions.  The  crises  of  1837  and  1839  were  obviously  due  to 
quite  a different  set  of  causes ....  The  tariff  had  nothing  whatever 
to  do  with  them. . . .The  crisis  of  1857  was  an  unusually  simple 
case  of  activity,  speculation,  over-banking,  panic,  and  depression; 
and  it  requires  the  exercise  of  great  ingenuity  to  connect  it  in  any 
way  with  the  tariff  act.” 

The  War  ^e  first  ac^  was  Passed  by  the  House  before  there 
Tariffs  was  an  exPec^ation  of  war  and  it  became  a law  be- 

fore war  began.  Mr.  Morrill,  Chairman  of  the  Com- 
mittee on  Ways  and  Means,  claimed  that  it  was  to  restore  practically 
the  rates  of  1846  but  to  make  the  duties  specific  instead  of  ad 
valorem . The  Act  was  “not  asked  for  and  but  coldlv  welcomed  by 


18 


the  manufacturers.”  In  the  anxiety  to  get  the  specific  duties  high 
enough  so  that  they  would  be  the  equivalent  of  the  ad  valorem  rates 
of  1846,  they  were  placed  where,  as  it  proved,  they  were  one-half 
higher  on  dutiable  goods,  and  perhaps  one-sixth  higher  on  all  im- 
ports, than  the  duties  under  the  law  passed  in  1846  were.  Then 
began  the  war  and  for  four  or  five  years  the  rates  climbed  up  stead- 
ily. There  was  an  ever  increasing  need  of  revenue,  a desire  to  offset 
internal  taxes  upon  manufactures,  a lack  of  time  for  careful  con- 
sideration, and  the  influence  upon  legislation  of  interested  capital- 
ists. An  act  passed  in  1862  raised  the  rate  upon  dutiable  goods 
by  about  one-half,  and  the  rate  upon  all  goods  by  about  one-third. 
In  1864  the  rates  made  another  and  an  equal  jump.  This  bill  was 
debated  in  the  House  just  three  days,  and  in  the  Senate  two  days. 
Its  protective  rates  remained  in  force,  in  the  main,  for  twenty  years 
and  both  rates  reached  about  the  same  height  that  the  rates  did 
under  the  so-called  Tariff  of  Abominations. 


Attempts  Within  the  first  six  years  after  the  war  practically 
all  the  internal  revenue  taxes  that  had  been  the 
Reductions  occasion  for  compensatory  protective  duties,  were 
swept  away.  Mr.  Morrill,  who  had  managed  the 
acts  of  1861,  1862,  and  1864,  in  the  House,  claimed  that  justice 
now  demanded  that  the  compensatory  duties  should  be  taken  off. 
But  other  questions  were  pressing,  the  manufacturers  opposed  re- 
ductions, the  matter  was  put  off  from  year  to  year,  the  Wells  Bill, 
which  would  have  made  a start  in  the  direction,  failed  in  1867,  for 
lack  of  a two-thirds  majority  in  the  House,  and  people  became  more 
and  more  habituated  to  the  continuance  of  the  duties  that  in  the 
beginning  had  been  intended  to  be  temporary.  Some  reductions 
were  made  in  1870,  but  mostly  upon  revenue  articles.  In  1872,  in 
answer  to  a demand  from  the  West,  a bill  was  passed,  finally  with 
the  consent  of  the  manufacturers  who  feared  a more  strenuous 
measure,  making  a general  reduction  of  ten  per  cent,  coupled  with 
a more  sweeping  reduction  of  non-protective  duties.  The  hard  times 
of  1873  reduced  importations  and  revenue,  and  the  ten  per  cent 
reduction  was  rescinded  in  1875.  From  that  time  on,  of  the  many 


19 


acts  introduced  and  debated,  no  one  had  much  chance  of  passage, 
until  The  Commission  Tariff  of  1888 . 

President  Grant’s  messages  counsel  postponement  of  revision,  care  not 
to  disturb  home  production  that  “affords  employment  to  labor  at  living 
wages  in  contrast  to  the  pauper  labor  of  the  Old  World.”  President 
Hayes’  messages  were  of  the  same  general  tenor.  In  1881  President  Ar- 
thur wrote  that  revision  was  necessary  and  favored  the  appointment  of  a 
commission  to  recommend  a bill.  The  next  year  he  declared  for  lower 
duties  upon  cotton  and  woolen  goods,  silk  goods,  iron  and  steel  manufac- 
tures, etc.;  yet  he  said  we  should  be  careful  not  to  abandon  the  policy  of 
protecting  and  aiding  American  labor. 

Taussig  says  of  the  Commission  Tariff  of  1883 : aIts  general 
character  cannot  be  easily  described ; in  truth,  it  can  hardly  be  said 
to  have  had  any  general  character.  On  the  whole,  it  may  be  fairly 
described  as  a half-hearted  attempt  on  the  part  of  those  wishing  to 
maintain  a system  of  high  protection,  to  make  some  concession  to  a 
public  demand  for  a more  moderate  tariff  system.”  It  proved  that 
the  act  actually  increased  the  ad  valorem  equivalent  rates.  The 
Morrison  Horizontal  Reduction  Bill  was  defeated  in  1884  by  a com- 
bination in  the  House  of  the  Republicans  and  protection  Democrats. 
The  tariff  was  the  chief  issue  in  the  campaign  of  1884  and  the 
Democrats  won.  Ho  other  President  ever  discussed  in  his  messages 
the  tariff  to  such  length  as  did  President  Cleveland.  His  mes- 
sages during  his  first  term,  that  of  1887,  being  entirely  devoted  to 
the  tariff,  contained  among  other  points  the  following : 

The  annual  revenue  is  ever  in  excess  of  our  needs.  It  is  a puzzle  what 
to  do  with  it.  No  more  bonds  are  due,  some  not  due  have  been  bought  at 
a premium,  the  interest  on  bonds  has  been  anticipated,  yet  accumulations 
are  being  hoarded  in  the  treasury,  inviting  to  lavish  expenditures,  to 
schemes  of  plunder,  and  crippling  business  thruout  the  country.  The 
worst  thing  is  that  we  are  therein  abandoning  the  theory  of  our  free  in- 
stitutions, which  would  lerve  to  every  man  the  product  of  his  toil  minus 
only  what  must  be  taken  for  the  support  of  the  government.  The  case  is 
becoming  one  of  ruthless  extortion  and  culpable  betrayal  of  fairness  and 
justice.  The  question  is  not  one  of  theory  between  free  trade  and  protec- 
tion. It  is  a condition  not  a theory  that  confronts  us.  Shall  we  reduce 
collections  to  our  needs?  The  internal  revenue  is  not  collected  from 
articles  that  are  really  necessaries.  There  is  no  complaint  as  to  it.  But 


20 


our  present  tariff  laws,  the  vicious,  inequitable,  and  illogical  source  of 
unnecessary  taxation  ought  to  be  revised ....  Seventy  per  cent  of  our  im- 
posts come  from  duties  upon  sugar,  wool,  silk,  iron  and  steel,  cotton,  flax, 
hemp,  jute,  and  their  manufactures.  The  average  rate  on  dutiable  goods 
is  just  about  what  it  was  during  the  civil  war.... A suspicion  is  abroad 
that  the  immense  fortunes  accumulated  in  this  country  during  late  years 
are  not  of  natural  growth.  This  scheme  lays  a tax  upon  every  consumer 
in  the  land  for  the  benefit  of  the  manufacturer.  The  excuse  is  that  pro- 
tection is  needed  for  “infant  industries,”  which  never  seem  ready  to  discard 
their  leading  strings.  New  recruits  are  always  being  added  to  the  ranks 
of  the  manufacturers  that  want  favor,  efforts  for  reform  meet  stubborn 
resistance ....  The  indirect  and  almost  stealthy  manner  in  which  these 
taxes  are  collected  conceals  their  true  nature  and  their  extent.  But  they 
are  paid  by  the  people  no  less  surely  when  added  to  the  price  of  the  things 
that  supply  their  wants,  than  if  paid  directly  to  the  tax-collector.  These 
tariff  laws  raise  the  price  to  the  consumer  of  all  articles  imported  and 
subject  to  duty,  by  precisely  the  sum  paid  in  such  duties.  The  amount 
of  the  duty  measures  the  tax  paid  by  those  who  purchase  these  imported 
articles.  Comparatively  few  use  imported  articles  but  millions  use  similar 
articles  made  at  home  and  pay  nearly  or  quite  the  enhanced  price  which 
the  duty  gives  to  the  imported  articles.  The  duties  from  the  imported 
articles  go  to  the  treasury,  but  those  who  buy  domestic  goods  pay  the  tax 
to  home  manufacturers.  Competition  at  home  often  is  strangled  by  trusts. 
Where  combination  is  necessary  to  keep  prices  up  it  is  proof  that  some  one 
is  willing  to  accept  lower  prices.  When  competition  at  home  keeps  prices 
below  the  point  of  importation,  it  is  proof  that  duties  are  not  needed  or 
at  least  that  reductions  can  be  made. . . .Classes  are  forming  here,  one  of 
the  very  rich  and  one  of  the  very  poor.  Corporations  are  becoming  the 
people’s  masters.  The  communism  of  the  rich  and  powerful  is  no  better 
or  less  dangerous  than  that  of  the  poor  and  needy. 

It  is  claimed  that  we  must  put  up  with  these  higher  prices  in  order 
that  our  laborer  may  be  protected  from  the  pauper  labor  of  Europe.  About 
2,600,000  out  of  our  17,400,000  workers  are  employed  in  manufacturing 
industries  that  claim  to  be  benefited  by  the  tariff.  To  these  the  protec- 
tionist makes  his  plea  to  save  their  employment  by  resisting  a change. 
The  laborer  is  interested  in  all  that  reduces  the  cost  of  living.  Let  us 
remember  that  when  looking  out  for  his  protection.  He  is  a consumer 
and  with  other  consumers  is  forced  to  pay  enhanced  prices  for  nearly 
everything  because  of  the  tariff.  We  must  and  can  reduce  for  him  the 
cost  of  living  without  curtailing  his  chances  for  work  or  reducing  his 
wages. . . .It  is  the  farmer  who  suffers  most  under  these  laws.  He  manu- 
factures nothing,  but  pays  the  increased  prices  for  manufactures.  His 


21 


own  products  must  struggle  unprotected  in  the  markets  of  the  world. 
The  farmer  is  told  he  must  have  a high  duty  on  wool.  The  farmers  that 
raise  no  sheep  thus  pay  tribute  to  those  that  do  and  to  the  manufacturer. 
The  few  farmers  who  do  raise  sheep  pay  more  than  enough  in  increased 
prices  for  manufactures,  to  sweep  away  all  their  gains  from  the  higher 
prices  of  wool ....  Of  the  4,000  articles  now  taxed,  many  are  not  worthy 
of  attention  and  should  be  put  upon  the  free  list.  The  main  reductions 
should  be  upon  necessaries  and  upon  raw  materials;  the  compensatory 
duties  should  be  taken  off  the  finished  products,  and  this  will  cheapen  pro- 
duction, extend  our  sales  abroad,  relieve  the  market  at  home.  . . .The  gov- 
ernment has  been  entering  into  partnership  practically  with  its  favorites, 
to  the  injury  of  the  masses.  The  favored  ones  refuse  to  abate  one  iota 
of  their  selfish  advantage  and  combine  to  control  legislation.  Yet  there 
should  be  no  sudden  changes  that  would  ruin  vested  interests.  Our  manu- 
facturers should  consent  to  reductions  lest  eventually  an  abused  people  in- 
sist upon  a too  sweeping  rectification  of  its  wrongs. 


Th  M 1C*  I The  Mills  Bill*  which  would  have  admitted  hemp, 
Tariff  Bill  an(^  wool  ^ree  5 which  would  have 

abolished  many  compensatory  and  specific  duties, 
was  passed  by  the  democratic  House  but  defeated  in  the  republican 
Senate  in  1888.  The  Senate  proposed  a further  extension  of  the 
protective  system  and  the  repeal  of  some  internal  taxes.  In  its 
platform  in  1888  the  Republican  party  declared  for  the  entire 
repeal  of  the  internal  taxes  rather  than  the  surrender  of  any  part 
of  the  protective  system.  The  election  was  fought  upon  the  tariff 
question  and  the  Republicans  won.  They  passed  the  McKinley  Bill 
in  1890. 

This  bill  worked  an  increase  in  the  protective  duties,  extending 
the  system  farther  than  during  the  war;  under  it  the  equivalent  ad 
valorem  rate  upon  dutiable  goods  rose  from  about  45  to  about  49 
per  cent.  The  bill  brought  down  the  rate  upon  all  goods  from 
about  29  to  about  21  per  cent.  Most  of  this  fall  was  due  to  the 
free  admission  of  sugar ; a bounty  of  two  cents  a pound  was  paid, 
however,  to  sugar-raisers.  The  bill  raised  the  duties  upon  raw 
wool,  also  those  upon  woolen  cloths,  dress  goods,  carpets,  etc.  The 
duties  upon  linens,  and  upon  some  silk  goods,  were  raised,  as  were 
those  upon  such  grades  of  cotton  goods  as  had  ordinarily  been  im- 
ported ; upon  the  cheaper  grades  of  cotton  manufactures,  and  upon 


22 


iron  and  steel  manufactures  the  duties  remained  the  same  or  were 
somewhat  reduced.  The  bill  extended  the  principles  of  minimum 
and  compound  duties.  All  thru  it  shows  a determined  effort  to 
bring  about  the  establishment  of  new  manufacturing  industries  in 
this  country  ; thus  it  was  sought  to  encourage  the  home  production 
of  tin  plate,  it  being  asserted  that  all  attempts  up  to  that  time  to 
establish  that  industry  had  been  thwarted  by  the  temporary  reduc- 
tion of  prices  by  foreign  syndicates.  A reciprocity  provision  was 
added  to  the  bill  at  the  last  moment ; this  empowered  the  President 
to  re-impose,  by  proclamation,  certain  duties  upon  sugar,  tea,  cof- 
fee, hides,  etc.,  unless  our  exports  were  received  upon  favorable 
terms  by  the  countries  sending  us  those  articles.  The  aim  was, 
chiefly,  to  get  concessions  from  South  American  countries. 

The  following  thoughts  are  to  be  found  in  Mr.  McKinley's 
opening  speech  upon  his  bill : 

The  all-important  question  in  the  campaign  of  1888  was  the  tariff 
question.  The  one  thing  that  election  settled  was  that  the  protective  pol- 
icy should  be  secured,  that  any  revision  must  be  made  in  full  recognition 
of  the  principle  of  protection.  We  have  not  abolished  the  internal  revenue 
system,  tho  such  taxes  are  reduced  somewhat.  We  have  extended  the 
drawback  system.  Any  American  citizen  may  import  any  raw  material, 
manufacture  it  into  the  finished  product  and  receive  back,  if  this  product 
is  exported,  within  one  per  cent,  the  duty  he  paid  on  the  raw  material. 
This  disposes  of  the  cry  that  the  tariff  prevents  our  manufacturers  from 
entering  the  foreign  market.  Statistics  show  that  protective  tariffs  have 
not  interrupted  our  export  trade  but  that  it  has  increased  under  them. 
The  balance  of  trade  has  been  in  our'  favor  during  the  protective  tarilf 
periods  of  our  history,  and  usually  against  us  under  revenue  tariff 
periods.  The  main  objections  to  this  bill  come  from  importers  and  from 
foreigners.  It  will  diminish  the  importation  of  foreign  competing  goods. 
We  do  not  conceal  the  purpose  of  this  bill — but  we  want  our  own  country- 
men and  all  mankind  to  know  it.  It  is  to  increase  production  here,  to  di- 
versify our  productive  enterprises,  enlarge  the  field,  and  increase  the 
demand  for  American  workmen.  This  is  an  American  bill,  made  for  the 
American  people  and  for  American  interests.  We  do  not  deprecate  the 
value  of  foreign  trade — but  is  not  an  American  consumer  a better  custo- 
mer for  us  than  a foreign  consumer?  Yet  our  foreign  trade  was  never 
so  great  as  today.  Since  1870  it  has  increased  two  and  one-half  times 
as  fast  as  that  of  Great  Britain.  Yet  our  domestic  trade  is  ninety-five 


23 


per  cent  of  our  whole  trade.  We  try  nations  as  they  appear  on  the  bal- 
ance-sheet of  the  world.  We  try  systems  by  results;  we  are  too  practical 
a people  for  theory.  After  twenty-nine  years  of  protective  tariff  laws  we 
find  ourselves  enjoying  a prosperity^  the  like  of  which  has  never  been  seen 
before,  either  here  or  elsewhere.  Our  workman  deposits  seven  dollars  in 
the  savings-bank  while  the  English  operative  deposits  one  dollar.  We  lead 
all  nations  in  agriculture,  in  mining,  in  manufacturing.  There  is  no  na- 
tion in  the  world  where  the  reward  is  given  to  the  labor  of  men’s  hands 
and  to  the  work  of  their  brains  that  is  given  in  the  United  States.  No 
sane  man  will  give  up  wdiat  he  has  for  what  is  promised  by  your  theories. 

President  Harrison  in  his  annual  message  of  1890,  praised  the  reci- 
procity clause,  claiming  that  it  would  have  been  an  unpardonable  error 
for  us  to  have  taken  off  the  duties  from  coffee,  tea,  hides,  and  sugar,  with- 
out demanding  a fair  return  as  regards  the  acceptance  of  our  products  by 
the  countries  producing  the  above  articles.  In  1891  he  wrote  that  the  act 
was  fulfilling  the  prophecies  of  its  friends,  that  our  foreign  commerce  was 
unparalleled,  the  free  list  large,  prices  not  advanced,  labor  splendidly  paid. 


Wilson 
Tariff 
of  1894. 


One  month  after  the  McKinley  Bill  went  into  effect 
the  congressional  elections  resulted  in  a sweeping 
Democratic  victory.  The  House  of  Representatives 
became  democratic,  almost  three  to  one.  Ttvo  years 
later  a Democratic  president  was  elected,  and  the  Senate  became 
democratic.  For  the  first  time  since  the  war  the  party  opposed  to 
a high  protective  tariff  controlled  every  branch  of  the  government. 
Grover  Cleveland  in  his  annual  message,  1893,  said:  “After  a hard 
struggle  tariff  reform  is  directly  before  us.”  He  reiterated  his 
arguments  for  free  raw  materials,  reduction  of  taxation  upon  the 
necessaries  of  life,  etc.  The  bill  reported  in  the  House  by  the  ways 
and  means  committee  faithfully  followed  the  recognized  Democratic 
program — free  raw  materials,  extinction  of  compensatory  duties, 
general  reductions,  especially  upon  the  necessaries  of  life.  It  pro- 
vided, too,  for  an  income  tax.  The  House  promptly  passed  the  bill.. 

In  the  Senate  the  sailing  was  not  smooth.  That  body  was 
closely  divided  politically.  T!he  votes  of  the  three  or  four  populists 
were  not  to  be  relied  upon.  Old  animosities  dating  back  to  Cleve- 
land’s first  administration  still  lived.  The  stormy  special  session 
of  the  preceding  summer,  when  the  purchase  clause  of  the  Sherman 


24 


Act  had  been  repealed,  had  left  its  sores.  The  Louisiana  senators 
were  opposed  to  free  sugar,  the  Maryland  and  the  West  Virginia 
senators  to  free  coal,  the  Alabama  senators  to  free  iron  ore ; one  of 
the  senators  from  New  York  to  the  income  tax;  several  senators 
from  different  states  to  free  wool.  The  bill  was  referred  to  the 
finance  committee,  thence  to  a sub-committee  (Jones,  Vest  and 
Mills) ; for  three  days  its  advocates  behind  closed  doors  in  the  Dem- 
ocratic caucus,  argued,  appealed,  threatened;  then  came  forth  a bill 
that  in  spite  of  its  wounds  and  scars  was  still  called  the  Wilson 
Bill.  Coal  and  iron  ore  were  no  longer  on  the  free  list;  a duty  had 
been  put  on  sugar;  the  rates  on  many  schedules  had  been  materi- 
ally raised.  The  Senate  passed  the  bill,  it  went  to  a conference 
committee,  there  was  a disagreement,  Chairman  Wilson  reported 
the  disagreement  in  the  House,  reading  a letter  from  President 
Cleveland,  in  which  it  appeared  that  the  writer  looked  upon  the  de- 
fection of  certain  Democratic  senators  as  treacherous  and  dishon- 
orable. Senator  Gorman  of  Maryland  made  his  notable  speech  in 
answer.  In  the  end  the  House  had  to  accept  the  Senate’s  terms. 
The  bill  became  a law  without  the  President’s  signature. 

The  Act  as  finally  passed  put  wool  upon  the  free  list  and  swept 
away  the  compensatory  duties,  with  whatever  disguised  protection 
they  contained,  from  the  woolen  manufactures.  The  ad  valorem 
rates  upon  the  same  were  in  the  main  kept  as  they  had  been  upon 
goods  where  competition  really  might  be  expected  to  occur.  In  other 
places  they  were  somewhat  reduced.  The  duties  upon  other  textile 
manufactures  were  really  reduced  but  little  if  at  all.  There  were 
many  nominal  and  ineffective  reductions.  Coal  and  iron  ore  were 
taxed,  but  at  a lower  rate  than  formerly.  Lumber  and  copper  were 
admitted  free,  the  latter  provision  at  least  being  of  little  conse- 
quence. The  duty  on  tin  plate  was  reduced  one-half.  The  reduction 
of  duty  on  pig  iron  and  on  steel  rails  still  left  the  rates  pro- 
hibitory. Eates  upon  chinaware  and  earthenware  were  consider- 
ably reduced.  The  bounty  on  sugar  was  abolished  and  an  impost 
of  4Q  per  cent  ad  valorem  put  on  raw  sugar ; an  additional  duty  of 
one-eighth  of  one  cent  per  pound  was  laid  on  refined  sugar,  with  an 


25 


extra  one-tenth  of  a cent  upon  such  as  came  from  countries  that  paid 
sugar  bounties.  It  was  popularly  considered  that  this  was  a sur- 
render to  the  sugar  trust.  The  provision  of  the  Act  taxing  all  in- 
comes exceeding  $4,000  was  later  declared  unconstitutional  by  the 
Supreme  Court,  on  the  ground  that  it  was  a direct  tax  and  was  not 
apportioned  among  the  states  according  to  population.  The  Wilson 
Bill  brought  down  the  equivalent  ad  valorem  rate  upon  dutiable 
goods  to  about  41  per  cent ; the  rate  on  all  goods  was  reduced  but 
very  slightly.  The  policy  of  reciprocity  was  abandoned. 

The  Dingley  ^ie  e^ec^on  1896  was  f°ught  upon  the  silver 
Tariff  of  1897  question.  Their  victory  gave  the  Republicans  con- 
trol again.  Upon  the  money  question  they  could 
not  and  did  not  need  to  legislate,  but  it  was  otherwise  as  to  the 
tariff.  Uncle  Sam’s  expenses  were  running  higher  than  his  ordin- 
ary receipts.  The  deficit  had  first  appeared  during  the  last  year 
of  the  McKinley  law,  due  to  decreased  importation  because  of  the 
hard  times  and  because  the  elections  had  foreshadowed  lower  rates. 
It  continued,  tho  perhaps  growing  less,  during  the  operation  of  the 
Wilson  tariff.  The  Supreme  Court’s  decision  that  the  income  tax 
was  unconstitutional  destroyed  all  chance  of  revenue  from  that 
source.  The  treasury  was  replenished  only  by  taking  for  use  the 
notes  redeemed  with  the  gold  obtained  thru  the  sale  of  bonds.  Pres- 
ident McKinley  called  a special  session  of  Congress  and  asked  for 
tariff  legislation.  The  bill  passed  was  essentially  a return  to  the 
policy  of  the  McKinley  bill;  indeed  it  went  a little  farther  than  the 
latter  bill  had  gone,  the  equivalent  ad  valorem  rates  upon  dutiable 
goods  having  mounted  higher  during  the  years  of  its  operation  than 
during  any  other  years  in  our  history,  and  averaging  about  50  per 
cent. 


For  the  fiscal  year  ending  with  June,  1902,  our  imports  were  valued 
at  $899,793,754.  The  goods  imported  free  were  valued  at  44  per  cent  of 
the  total  value.  The  dutiable  goods  paid,  at  an  average  equivalent  ad 
valorem  rate  of  49.8  per  cent,  $251,453,155  in  duties.  This  was  $3.17  for 
each  man,  woman,  and  child  in  the  United  States.  During  the  fiscal  year 
ending  in  June,  1899,  the  rate  upon  dutiable  goods  touched  the  top  notch 
in  our  history,  52.07  per  cent.  The  high  rate  has  not  diminished  impor- 


26 


tation,  the  value  of  our  imports  for  the  last  three  years  having  been 
greater  than  during  any  other  three  consecutive  years.  The  equivalent 
ad  valorem  rate  upon  all  goods  is  averaging  about  28.5.  It  is  important 
to  remember  that  when  rates  are  so  high  as  to  be  prohibitory,  they  cut  no 
figure  in  the  ad  valorem  rates  quoted.  The  principal  articles  admitted 
free,  with  a figure  after  each  that  represents  the  value  of  the  importation 
in  round  millions,  were  as  follows  for  the  last  complete  fiscal  year:  Cof- 
fee, 71;  silk,  raw  43  ; hides  and  skins,  raw,  n.  e.  s.,  41;  chemicals,  drugs, 
dyes,  n.  e.  s.,  34 ; fibres,  grasses,  28 ; India  rubber,  gutta  percha,  27 ; cop- 
per, unmanufactured,  25;  tin  bars,  etc.,  19;  cotton,  unmanufactured,  12;  furs, 
fur  skins,  raw,  n.  e.  s.,  10;  fruits  and  nuts,  n.  e.  s.,  9. 

The  following  will  show  from  what  articles  we  collect  the  largest 
amounts  in  duties,  the  value  of  the  importations,  and  the  equivalent  ad 
valorem  rate  for  each: 


Article 

Values 

Duty  collected 

Rate 

1. 

Sugar  ( and  molasses ) 

. .$61,064,950 

$53,009,269 

86.81 

2. 

Wool  and  manufactures  of 

..  35,353,020 

26,396,839 

74.64 

3. 

Manufactures  of  cotton 

..  44,590,085 

24,485,988 

54.91 

4. 

Tobacco  and  manufactures  of 

, ..  16,332,287 

18,757,718 

114.85 

5. 

Manufactures  of  silk 

. . 32,242,228 

17,293,290 

53.64 

6. 

Fibres,  grasses,  and  manuf . of . . . 

. ..  41,076,059 

15,157,639 

36.90 

7. 

Tron,  steel,  and  manuf.  of 

, . . 28,261,053 

10,464,404 

37.03 

8. 

Liquors  

. . 14,233,197 

10,148,513 

71.30 

9. 

Tea  

7,882,607 

76.33 

10. 

Chemicals,  drugs,  dyes,  n.  e.  s . . . . 

. . 23,513,121 

6,369,018 

27.09 

From  the  above  we  get  about  half 

our  duties. 

Other  important  articles  are:  Earthen,  stone,  and  china  ware; 

fruits 

and  nuts,  n.  e.  s. ; leather  and  manufactures  of;  glass  and  glassware; 
vegetables;  wood  and  manufactures  of,  n.  e.  s. ; hides  of  cattle;  jewelry 
and  precious  stones. 

The  government  reports  to  analyze  the  way  the  present  tariff  works, 
make  of  all  articles  five  classes:  Class  A,  articles  of  food  (and  live  ani- 
mals) ; Class  B,  crude  materials  for  use  in  manufacturing;  Class  C,  wholly 
or  partially  manufactured  articles  to  be  used  as  materials  in  manufactur- 
ing ; Class  D,  manufactures  ready  for  consumption ; Class  E,  articles  of  vol- 
untary use.  Now  we  may  give  the  per  cent  that  the  value  of  dutiable 
goods  of  each  class  forms  of  the  value  of  all  dutiable  imports,  the  per  cent 
the  value  of  its  free  goods  forms  of  the  value  of  all  free  goods,  the  per  cent 
that  the  value  of  free  goods  forms  of  all  the  goods  of  the  same  class,  etc.: 


27 


Class  A 

B 

C 

D 

E 

1. 

Furnishes  of  all  dutiable  goods  imported. . .22% 

14% 

13% 

27% 

24% 

2. 

Furnishes  of  all  free  goods 23 

65 

5 

3 

2 

■3. 

Portion  of  the  class  that  comes  in  free 45 

79 

24 

9 

7 

4. 

Ad  valorem  rate  on  all  goods  (equivalent). ..37 

6 

20 

45 

50 

5. 

Equivalent  ad  valorem  rate  on  dutiable 68 

30 

27 

49 

57 

6. 

Part  of  whole  duty  derived  from  class 30 

8 

7 

27 

27 

7. 

Furnishes  of  all  goods  imported 24 

36 

10 

17 

14 

From  these  figures  it  will  be  seen  that  few  manufactures  and  few 
luxuries  come  in  free ; the  rates  upon  these  goods  are  high  and  from  them 
we  get  a large  portion  of  our  revenue,  as  we  do  also  from  the  all-important 
article,  sugar,  and  from  tea,  both  of  which  are  in  Class  A.  Materials  to 
be  used  by  our  manufacturers,  for  the  most  part,  either  come  in  free  or 
are  more  lightly  taxed;  their  importation  has  increased  greatly  during  the 
last  decade.  Here  belong  fibres,  raw  silk,  India  rubber,  hides,  skins,  furs, 
chemicals,  wool,  cotton,  tin  in  blocks,  woods,  etc. 

There  has  been  more  contention  during  the  last  decade  or  two  over 
wool  and  woolen  goods  than  over  any  other  articles.  The  present  law 
took  avooI  oft'  the  free  list,  made  three  classes  of  wool,  and  taxed  these  at 
11,  12,  and  4 cents  a pound  respectively. 

The  equivalent  ad  valorem  rate  last  year  on  raw  wool  was  59  per 
cent.  . . .Upon  manufactures  of  wool  the  duties  are  compound;  thus,  upon 
Brussels  carpet,  44  cents  a yard  and  40  per  cent  ad  valorem.  The  four 
important  classes  of  woolen  manufactures  imported  are  women’s  dress 
goods,  cloths  for  men’s  wear,  carpets,  ready-made  wearing  apparel.  The 
equivalent  ad  valorem  rates  upon  these  last  year  were,  respectively,  103, 
98,  64,  and  83  per  cent.  Many  of  the  rates  are  prohibitory;  thus,  almost 
the  only  carpets  imported  are  those  made  whole  for  rooms,  and  of  dress 
goods  and  cloths  the  importations  are  almost  entirely  of  the  finer  quali- 
ties. This  does  not  mean  of  course  that  the  prices  of  cheaper  goods  are 
not  increased  to  the  consumer  because  of  the  tariffs  that  are  prohibitory. 


Exports  of  ^ we  ma^  Relieve  the  figures  the  greatest  statis- 
rianufactures  tican  of  our  greatest  rival  nation,  we  easily  rank 
first  as  a manufacturing  nation.  Mr.  Mnlhal] 
eight  years  ago  credited  ns  with  a product  as  great  as  that  of  Eng- 
land and  France  combined.  This  happens  not  only  because  we 
have  more  workmen  engaged  in  manufacturing  industries  but  be- 
cause the  average  output  per  employee  is  nearly  three  times  the 
English  average.  Our  home  consumption  of  manufactures  is  enor- 


28 


mous  and  we  do  not  rank  first  by  any  means  in  the  exportation  of 
manufactures.  The  splendid  iron  ores  of  the  Lake  Superior  re- 
gions, their  marvelously  cheap  transportation  on  the  Great  Lakes, 
the  immense  scale  on  which  the  iron  and  steel  manufacturing  has 
been  carried  on,  have  enabled  us  to  contend  with  fair  success  against 
England  and  Germany  in  the  markets  of  the  world,  and  our  exports 
of  iron  and  steel  products  increased  four  or  five  hundred  per  cent 
between  1890  and  1900,  when  (in  1900)  we  exported  such  products 
to  a value  of  $122,000,000.  This  is  perhaps  half  the  value  of  Eng- 
land’s exports  in  the  same  line.  Refined  mineral  oil  is  the  next  larg- 
est item  in  the  list  of  our  exports  of  manufactures.  The  Standard 
Oil  Company  divides  with  Russian  producers  the  markets  of  the 
world.  The  next  item  is  copper.  We  produce  half  the  copper  of 
the  world.  The  next  item  is  leather  and  its  manufactures.  The 
next  is  cotton  manufactures ; altho  we  raise  eighty  per  cent  of  the 
world’s  cotton,  and  consume  more  raw  cotton  than  England,  yet  our 
exports  of  manufactured  cotton  are  only  about  seven  per  cent  of 
those  of  England.  This  is  the  only  textile  line  in  which  we  have 
done  anything  in  exportation.  Our  export  of  agricultural  imple- 
ments comes  next.  How  much  our  protective  system  has  had  to 
do  with  our  wonderful  development  in  manufacturing  industries 
is  an  undetermined  question.  It  is  clear  that  we  are  doing  the  best 
in  meeting  foreign  competition  in  those  lines  where  we  are  advan- 
tageously situated  as  to  the  raw  materials. 


Reciprocity. 


We  have  made  four  tests  of  the  policy  of  reciproc- 
ity; we  had  a reciprocity  treaty  with  Canada  from 
1855-1866,  under  which  certain  important  articles  from  either 
country  were  admitted  free  by  the  other;  we  had  a reciprocity  treaty 
with  Hawaiian  Islands  from  1876  until  their  annexation  in 
1900,  by  virtue  of  which  we  admitted  their  sugar  and  other  tropi- 
cal products  free  in  return  for  like  favor  shown  our  breadstuffs, 
provisions,  manufactures,  etc. ; under  the  provisions  of  the  McKin- 
ley law  agreements  were  made  during  the  first  year  or  two  after  its 
passage  with  Brazil,  Cuba  and  Porto  Rico  (thru  Spain),  with  Ger- 
manv,  the  Dominican  Republic,  British  West  Indies  and  Guiana, 


29 


Austria-Hungary,  and  Central  American  States,  under  which,  in 
return  for  certain  favors,  we  admitted  free,  sugar,  molasses,  coffee, 
hides,  until  the  Wilson  tariff  was  passed;  under  the  provisions  of 
the  Dingley  law  we  have  made  agreements  with  France,  Portugal, 
Germany  and  Italy,  the  agreements  affecting  however  but  few 
articles.  A reciprocity  treaty  with  Cuba  seems  probable. 

President  McKinley’s  last  speech,  delivered  at  Buffalo  the  day 
before  he  was  shot,  contained  strong  words  for  reciprocity : 

Our  capacity  to  produce  has  developed  so  enormously. . . .that  the 

problem  of  more  markets  requires  our  urgent  and  immediate  attention 

By  sensible  trade  arrangements  which  will  not  interrupt  our  home  produc- 
tion we  shall  extend  the  outlets  for  our  increasing  surplus.  ..  .We  must 
not  repose  in  fancied  security  that  we  can  forever  sell  everything  and  buy 
little  or  nothing ....  Reciprocity  is  the  natural  outgrowth  of  our  wonder- 
ful industrial  development ....  The  period  of  exclusiveness  is  past.  The 
expansion  of  our  trade  and  commerce  is  the  pressing  problem.  Commer- 
cial wars  are  unprofitable.  A policy  of  good  will  and  friendly  trade  rela- 
tions will  prevent  reprisals.  Reciprocity  treaties  are  in  harmony  with  the 
spirit  of  the  times  ; measures  of  retaliation  are  not. 

The  Republican  party  is  pledged  to  reciprocity.  President 
Roosevelt’s  insistence  upon  the  ratification  of  the  Cuban  treaty  is 
well-known.  The  Democratic  party’s  stand  upon  the  question  may 
be  judged  from  the  following  expressions  culled  from  the  Congres- 
sional Campaign  Book  of  1902 : 

Reciprocity  is  a device  for  making  one  friend  and  ten  enemies.  It  is 
a sugar  coating  for  the  benefit  of  those  who  are  refusing  to  take  their  pro- 
tection pills  straight ....  There  is  nothing  in  it  for  the  farmer ....  It  hunts 
foreign  markets  with  a club.  . . .We  are  out  of  pocket  a hundred  million 
dollars  because  of  favoritism  shown  Hawaii ....  Annexation  has  made  reci- 
procity perpetual ....  Our  experience  with  reciprocity  under  the  McKinley 
bill  was  similar.  Under  the  Dingley  law  the  mountain  has  labored  and 
brought  forth  a mouse.  Our  reciprocity  with  European  countries  is  too 
petty  to  discuss.  Cuban  reciprocity  would  be  of  the  Hawaiian  type. 

Three  positions  should  be  defined.  Let  the  Demo- 
cratic Congressional  Campaign  Book  for  1902  and  the 
Democratic  platform  for  1900  speak  for  the  Demo- 
cratic view: 

The  trusts  have  made  the  tariff  a very  practical  question.  Protected 
from  outside  competition  by  high  tariff  walls,  we  have  hundreds  of  trusts 


The  Trusts 
and 

The  Tariff. 


30 


that  charge  as  high  prices  for  their  products  as  the  tariff  will  permit. . . . 
while  selling  in  foreign  markets  on  a lower  level  of  prices ....  The  tariff 
ties  the  consumer’s  hands  while  the  trusts  pick  his  pockets.  (Campaign 
Book,  pp.  146-7.  Much  evidence  is  given  to  show  that  since  the  passage 
of  the  Dingley  tariff,  trusts  have  been  formed  in  great  numbers,  that  they 
have  advanced  prices  at  home,  and  have  sold  more  cheaply  abroad)  .... 
And  from  the  Democratic  platform  of  1900:  “Tariff  laws  should  be  amended 
by  putting  the  products  of  trusts  upon  the  free  list.” 

President  Roosevelt  may  speak  for  the  great  majority  of  the 
Republicans.  He  has  said  in  effect: 

Wages  are  higher  than  ever  before  in  our  history.  Every  effort  should 

be  bent  to  secure  the  permanency  of  this  condition  of  things There  is 

general  acquiescence  in  the  present  tariff  system.  Nothing  could  be  more 
unwise  than  to  disturb  business  by  any  general  changes. . . .Yet  reciprocity 
is  advisable ....  Duties  must  never  be  reduced  below  what  will  cover  the 
difference  between  labor  cost  here  and  abroad.  . .To  attempt  to  reach  trusts 
thru  tariff  reductions  would  be  ineffective.  Many  of  the  largest  corpora- 
tions would  not  be  affected  in  the  slightest  degree  by  a change  in  the  tariff 
save  as  such  changes  interfered  with  the  general  prosperity  of  the  country. 
To  reduce  duties  would  be  to  ruin  first  the  small  competitors  of  the  trust. 
....  A commission  of  experts  might  well  be  appointed  to  recommend  tariff 
revisions. 

There  are  some  Republicans  who  are  not  disposed  to  believe 
with  President  Roosevelt  and  the  majority  of  their  party.  Let 
Governor  Cummins,  who  has  headed  this  opposing  view  speak  for 
the  so-called  “Iowa  idea 

There  are  duties  that  are  absolutely  indefensible.  They  can  be  re- 
duced greatly  and  still  the  American  manufacturer  will  occupy  the  whole 
American  market ...  . And  therefore  they  ought  to  be  reduced,  not  years 
hence  but  now. . . We  who  believe  the  time  has  come  to  make  certain  changes 
....  do  not  favor  the  reduction  of  any  schedule  below  the  point  at  which 
the  American  manufacturer  can,  if  he  will,  monopolize  the  whole  American 
market  at  a fair  price.  We  stand  for  tariff  duties  so  adjusted  that  the 
potential  competition  from  other  countries  will  prevent  producers  at  home 
from  exacting  more  than  a just  and  reasonable  price  for  what  they  pro- 
duce  “If  this  citadel  of  protection  ever  falls  it  will  be  because  its  friends 

make  the  excesses  and  perversions  of  that  policy  so  obnoxious  that  they 
obscure  the  righteousness  and  the  glory  of  the  principle  itself.” 


31 


T"E  LIBRARY  OF  THE 

i/i  AY  1 9 1931 


UNIVERSITY  Hf  JL1  NOIS 

Announcements . 


June  4 — Annual  Commencement. 

June  8 - July  17 — First  summer  term  of  six  weeks. 

July  20  - August  27 — Second  summer  term  of  six  weeks. 

September  7 - November  5 — Fall  term  of  twelve  weeks. 

At  the  summer  terms  are  taught  nearly  all  of  the  regular 
twelve-week  courses  in  the  various  subjects.  Students  are  expected 
as  a rule  to  take  two  major  subjects  only,  and  recite  twice  per  day 
in  each.  There  are  also  minor  courses  in  many  subjects  and  spe- 
cial courses  for  mature  teachers. 

Especial  facilities  will  be  provided  for  the  physical  and  bio- 
logical sciences  and  for  elementary  nature  study.  A school  garden 
of  two  and  one-half  acres  is  used  in  this  work. 

Two  teachers  give  instruction  in  art;  the  courses  include  clay 
modeling,  raffia,  weaving  and  construction  work  for  elementary  pu- 
pils, perspective,  sketching,  color,  and  the  history  of  art. 

Besides  the  ordinary  courses  in  the  elements  of  musical  nota- 
tion and  the  accompanying  exercises  in  singing,  special  courses  are 
provided  in  public  school  music,  and  in  chorus  practice.  Dr. 
George  F.  Boots  The  Haymakers*  Cantata  will  be  rendered  by  the 
students  about  July  15. 

The  faculty  of  the  first  term  will  consist  of  twenty-four  in- 
structors. Twelve  will  teach  the  second  term. 

Good  board  and  rooms  can  be  had  at  from  $3  to  $4  per  week. 

Tuition  is  free  to  residents  of  Illinois. 

Address  all  inquiries  for  catalogs  and  information  to 

David  Felmley,  President. 


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